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In a significant legal development, the 2nd US Circuit Court of Appeals in Manhattan revived a lawsuit on Friday, where investors accused Binance, the world’s largest cryptocurrency exchange, of violating United States securities laws. The lawsuit contends that Binance sold unregistered tokens that subsequently incurred substantial losses for investors.
In a unanimous 3-0 decision, the appeals court asserted that investors in the proposed class action had credibly <a href="https://www.reuters.com/technology/binance-must-face-revived-investor-lawsuit-us-over-crypto-losses-2024-03-08/" rel="noopener noreferrer nofollow">alleged</a> the application of domestic securities laws. This conclusion was based on the argument that once investors paid for the tokens, their purchases became irrevocable in the United States.&nbsp;
As reported earlier by TheCoinRise,<a href="https://thecoinrise.com/binance-unveils-next-platform-to-boost-users-predictive-capabilities/" rel="noopener noreferrer nofollow"> Binance debuted its Next Platform,</a> which empowers users to speculate on which tokens will be the next to join the exchange’s roster.&nbsp;
<h2 id="span-style-font-weight-400-binance-faces-a-reopened-lawsuit-span">Binance Faces a Reopened Lawsuit</h2>
The court pointed to Binance’s use of domestic Amazon computer servers to host its platform as a crucial factor supporting the application of US securities laws. Notably, the court highlighted Binance’s tendency to deny the applicability of any other country’s securities regulation regime.
Circuit Judge Alison Nathan emphasized that the investors could pursue claims related to purchases made within the year before filing the lawsuit. This decision overturns a March 2022 ruling by US District Judge Andrew Carter in Manhattan, sending the case back to him for further proceedings.
<h3 id="span-style-font-weight-400-investors-who-purchased-7-tokens-span">Investors Who Purchased 7 Tokens</h3>
The lawsuit involves investors who purchased seven tokens—ELF, EOS, FUN, ICX, OMG, QSP, and TRX—via Binance starting in 2017, witnessing a subsequent significant decline in their value.&nbsp;
The investors allege that Binance failed to adequately warn them about the “significant risks” associated with these tokens and are seeking to recoup their initial investments.
<h2 id="span-style-font-weight-400-us-laws-do-not-apply-to-operations-span">US Laws Do Not Apply to Operations</h2>
Binance has consistently argued that US securities laws do not apply to its operations, emphasizing the location of its exchange outside the United States. However, the revived lawsuit challenges this assertion, bringing the focus back to the alleged violations and the accountability of Binance within the US legal framework.
This legal development underscores the increasing scrutiny faced by major cryptocurrency exchanges and their compliance with securities laws.&nbsp;
<h3 id="span-style-font-weight-400-binance-and-nigeria-span">Binance and Nigeria&nbsp;</h3>
The Central Bank of Nigeria (CBN) has<a href="https://thecoinrise.com/binance-under-the-crosshairs-of-nigerian-central-bank-details/" rel="noopener noreferrer nofollow"> intensified its scrutiny of Binance,</a> and the exchange<a href="https://thecoinrise.com/binance-drops-the-nigerian-naira-amid-10b-fine-scare/" rel="noopener noreferrer nofollow"> dropped the Nigerian naira</a> from its peer-to-peer (P2P) trading platform.&nbsp;
Notably, Bayo Onanuga, a Special Adviser to the Nigerian President on Information and Strategy, officially<a href="https://thecoinrise.com/nigeria-refutes-alleged-10b-fine-on-binance/" rel="noopener noreferrer nofollow"> denied recent reports suggesting a $10 billion fine</a> imposed on the cryptocurrency exchange.
The post <a href="https://thecoinrise.com/binance-faces-revived-lawsuit-over-alleged-securities-violations/" rel="noopener noreferrer nofollow">Binance Faces Revived Lawsuit Over Alleged Securities Violations</a> appeared first on <a href="https://thecoinrise.com" rel="noopener noreferrer nofollow">Latest News and Insights on Blockchain, Cryptocurrency, and Investing</a>.

Binance Faces Revived Lawsuit Over Alleged Securities Violations

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